Ayr Wellness aims to close plan of arrangement on Feb. 7

By Marisa Wong

Los Angeles, Jan. 31 – Ayr Wellness Inc. said it has met the regulatory requirements necessary for the closing of its previously announced plan of arrangement under Section 192 of the Canada Business Corporations Act, according to a press release.

As announced in December, the company had obtained approval from the Ontario Superior Court of Justice and noteholder approval of the plan of arrangement. The company added in the latest announcement that it has received approvals from applicable state cannabis regulators.

As a result, the closing of the arrangement is targeted for on or around Feb. 7.

The record date for determining the shareholders entitled to receive the anti-dilutive warrants under the arrangement has been set as the close of business on Feb. 5.

Under the arrangement, among other things, all of the company’s outstanding 12˝% notes due Dec. 10, 2024 will be exchanged for new 13% senior secured notes due Dec. 10, 2026 issued by AYR Wellness Canada, a wholly owned subsidiary, and guaranteed by the company.

Also, 29,040,140 subordinate, restricted or limited voting shares, representing 24.9% of the pro forma fully diluted issued capital will be issued to the holders of the new notes; 23,046,067 share purchase warrants with an exercise price of $2.12 will be issued to the holders of record of the issued and outstanding subordinate, restricted or limited voting shares, multiple voting shares of the company and shares of any subsidiary of the company that are exchangeable for subordinate, restricted or limited voting shares, representing 16.5% of the pro forma fully diluted issued capital; AYR Wellness Canada will issue $50 million additional principal amount of the new 13% notes for net proceeds of $40 million as a result of a 20% original issue discount; and 5,947,980 subordinate restricted or limited voting shares representing about 5.1% of the pro forma fully diluted issued capital will be issued to the backstop party.

As noted before, Moelis & Co. LLC is financial adviser to Ayr. Stikeman Elliott LLP and Weil Gotshal & Manges LLP are acting as its Canadian and U.S. legal counsel, respectively.

Ducera Partners LLC is acting as financial adviser to the supporting senior noteholders. Goodmans LLP and Paul Hastings LLP are acting as those noteholders’ Canadian and U.S. legal counsel, respectively.

Ayr is a cannabis company based in Miami.

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